As President Biden moves to suspend oil and gas leasing on federal land - and has halted further development of the Keystone Pipeline - California has announced fossil-fuel vehicle sales bans by 2035. So what about on a country-level? Who has already announced future bans?
To help us answer those questions is BofA's equity strategist Haim Israel who laid out to clients in a note titled "Climate Wars" this week which countries are set to ban gasoline cars.
More than a dozen countries from 2025 to 2040 have already announced future bans on gasoline cars. The first bans include Belgium and Norway in 2025. In 2030, Germany, India, Netherlands, Denmark, Israel, Sweden, Ireland, and the UK. While most US has yet to commit to banning gasoline car sales, California is the only state that has said by 2035 it could do so. Under a Biden administration, we assume more and more states will soon announce their plans to ban gasoline car sales. And last, by 2040, Canada, France, Taiwan, Spain, and Singapore announced they will ban gasoline car sales.
Israel laid out each country's progress of electric car sales between 2025 to 2030. He mapped out how France was likely to be the leader with the highest share of electric vehicle sales in terms of annual car sales.
For the US to take federal action and ban gasoline car sales in the future. More electric car supply chains need to be shifted to the US from Asia. Biden's plan requires at least 50% of EV parts be made in the US.
"This would not only rapidly accelerate a transition to EVs but likely be accompanied with policy to support US supply chains vs the largely Asia based battery/EV value chain currently. A Chevrolet Bolt for example has only 24% of the parts used from the US & Canada (per Bloomberg), with Korean based LG Chem providing much of the content. Policies to require >50% parts made in America are already beginning to be announced by President Biden, with all-electric vehicles purchased for the Federal fleet requiring this threshold, for example," Israel said.
With the world gravitating towards EVs and countries already announcing future bans on gasoline cars, the push to electrify transportation will require large amounts of rare earth metal production.